EMPLOYMENT AGREEMENT


         AGREEMENT made and entered into as of April 1, 1997 (the "Agreement"),
by and between TEXFI INDUSTRIES, INC., a Delaware corporation with offices at
5400 Glenwood Avenue, Raleigh, North Carolina ("Texfi" or the "Company"), and
ANDREW J. PARISE, JR., ("Parise").

                              W I T N E S S E T H:
         WHEREAS, Parise and the Company previously entered into an Employment
Agreement dated as of October 31, 1994; and
         WHEREAS, Parise and the Company desire to cancel the October 31, 1994
Agreement and enter into this Employment Agreement;
         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree that the following provisions shall constitute the Agreement:
         1.       Termination of  Prior Agreement.   As of the  date  of  this  
Employment  Agreement  , the Employment  Agreement  dated October 31, 1994 by 
and between  Parise and the Company shall be terminated andbe of no further 
force or effect.
         2.       Employment.       Texfi hereby employs Parise and Parise 
hereby  accepts  employment  with Texfi for the term set forth in Section 3 
below,  in the position  and with the duties and  responsibilities set forth in
Section 4 below, and upon the other terms and conditions hereinafter stated.
         3.       Term.    Unless otherwise  terminated as hereinafter  
provided,  the term of the 

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Agreement shall commence on April 1, 1997 and shall continue through 
April 30, 2000.
         4.       Position, Duties, Responsibilities, Extent of Services.
                  4.1 Position. It is intended that, at all times during the
term of the Agreement, Parise shall serve as President and Chief Operating
Officer of the Company. In accordance with such position, he is hereby granted
appropriate responsibilities duties, and authorities, subject to the direction
of the Chief Executive Officer of the Company.
                  4.2 Extent of Services. During his employment under this
Agreement, Parise shall devote his full time and attention to the business and
affairs of Texfi; provided, however, that nothing in this Agreement shall
preclude Parise from engaging in charitable and civic activities or from
managing his personal investments so long as such outside activities do not
unreasonably interfere with the performance of his duties and responsibilities
under this Agreement.
         5.       Salary.           For services rendered by him under this 
Agreement,  Parise shall receive a base  salary at the annual  rate of  
$375,000  (the  "Base  Salary"),  payable  at least in equal  monthly 
installments.
         6.       Bonus.            Parise will be eligible to participate in 
the incentive bonus plans in effect from time to time for senior executive 
officers of Texfi.
         7.       Stock  Options.  Texfi hereby  grants to Parise [nonqualified]
[qualified]  stock  options of the Company in the amount of 100,000  shares of 
common stock of the Company.  Such options  shall expire on a date ten (10)  
years from the date of this Agreement and shall be exercisable at a price 
equal to $4.125 per share.
         8.       Employee Benefit Plans.   Parise will be provided employee 
benefit 


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programs comparable to those being provided by Texfi to senior executive
officers during the term of the Agreement.
         9.       Reimbursable Expenses.
                  9.1 Business Expenses. During the term of his employment
hereunder, Parise shall be entitled to receive proper reimbursement for all
reasonable out-of-pocket expenses incurred by him (in accordance with the
policies and procedures established by Texfi for its senior executive officers)
in performing services hereunder, provided Parise properly accounts therefor.
                  9.2      Automobile.      During  the  term  of  his  
employment hereunder, Texfi will furnish to Parise an automobile to be used in 
performing his duties on behalf of Texfi.
         10.      Termination of Employment.
                  10.1 Death. In the event of the death of Parise during the
term of this Agreement, the following payments shall be made to his designated
beneficiary or, in the absence of such designation, to his estate: (a) his Base
Salary, as provided in Section 5, though the end of the month in which death
occurs, and (b) any amounts due under Incentive Bonus Plans then in effect in
accordance with the terms of such plans.
                  10.2 Long Term Disability. In the event that Parise shall
suffer an illness or mental or physical disability or incapacity of such a
nature, degree or effect that he is unable to perform his duties hereunder for a
continuous period of six months or for shorter periods aggregating six months
within any 12-month period, the Company, at its sole option, may terminate his
employment and this Agreement. Upon such termination, Parise, shall be entitled
to payment of (a) his Base Salary, as provided in Section 5, through 

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the end of the pay period in which the termination occurs, and (b) any amounts 
due under Incentive Bonus Plans then in effect in accordance with the terms of 
such plans.
                  10.3 For Cause. The Company shall have the right to terminate
the employment of Parise and this Agreement for "cause." For purposes of this
Agreement, "cause" shall mean: (I) Parise's willful and continued failure to
perform substantially his duties under this Agreement (other than by reason of
illness or mental or physical disability or incapacity) for more than 60 days
after a written demand for substantial performance is delivered to him by the
Board of Directors of the Company, which demand specifically identifies the
manner in which Parise has not substantially performed his duties; (ii) theft or
misappropriation by Parise of assets of the Company; or (iii) actions by Parise
which constitute an act of moral turpitude or that materially injure the
Company. If Parise's employment is terminated for cause, he shall be entitled to
his Base Salary, as provided in Section 5, through the end of the pay period in
which the termination occurs.
                  10.4 Without Cause. Notwithstanding any other term or
provision of this Agreement, the Company may terminate Parise's employment and
this Agreement at any time and for whatever reason it deems appropriate. In the
event such termination by the Company occurs and is not due to disability
pursuant to Section 10.2 or for cause pursuant to Section 10.3, Parise shall be
entitled to payment of (a) his Base Salary, as provided in Section 5, for the
greater of six (6) months from the date of termination or the remaining term of
this Agreement, and (b) any amounts due under Incentive Bonus Plans then in
effect in accordance with the terms of such plans.
                  10.5 Voluntary Termination. Parise may voluntarily terminate
his 

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employment with the Company on at least 60 days' prior written notice. Upon
such termination, Parise shall be entitled to his Base Salary, as provided in
Section 5, though the end of the pay period in which the termination occurs.
                  10.6 Change of Duties.Parise may voluntarily terminate his
employment with the Company on at least 60 days' prior written notice at any
time after his position, responsibilities and duties as President and Chief
Operating Officer of the Company, as set forth in Section 4.1, are substantially
changed and the new position, responsibilities and duties assigned to him are
not reasonably acceptable to him. In the event of such termination, Parise shall
be entitled to payment of (a) his Base Salary, as provided in Section 5 for the
greater of six (6) months from the date of termination or the remaining term of
this Agreement, and (b) any amounts due under Incentive Bonus Plans then in
effect in accordance with the terms of such plans.
         11.      Acceleration of Stock Options.     All  outstanding  and  
unexpired  stock options held by Parise that are not then exercisable  shall 
become  exercisable,  in whole or in part, for a period of sixty (60) days 
following termination of employment pursuant to Section 10.4 or Section 10.6.
         12.      Covenants Not to Compete.
                  12.1     Competition; Soliciting Customers. Parise promises 
and agrees that, until the later of (a) the termination of the Agreement or 
(b) the expiration of any salary payments made to Parise pursuant to Sections 
10.4 or 10.6, he will not, directly or indirectly:
                           (i) own, manage, operate, control, be employed by,
                           render 
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                            advisory services to, participate in or be connected
                            in any management or control of any business in the
                            United States that is engaged in competition with
                            Texfi or any of its subsidiaries or affiliates in
                            the commission dyeing and finishing of textile
                            products or the manufacture and/or sale of textile
                            products of the same or a like nature to the
                            products of Texfi and its subsidiaries, or (ii)
                            influence or attempt to influence any customer of
                            Texfi or any of its subsidiaries or affiliates to
                            divert its purchases of woven or knit fabrics or
                            other products to any individual, partnership, firm,
                            corporation or other entity then in competition with
                            Texfi or any of its subsidiaries or affiliates.
For purposes of this Section 12.1, "competition with Texfi or any of its
subsidiaries or affiliates" shall mean direct competition for customers of
textile products or services in any geographic area in which Texfi or any of its
subsidiaries or affiliates is engaged, directly or indirectly, in selling or
attempting to sell such products or services/
                  12.2 Soliciting Employees; Interference.Parise promises and
agrees that, for a period of one year after the later of (a) the termination of
the Agreement, or (b) the expiration of any salary payments made to Parise
pursuant to Sections 10.4 or 10.6, he will not, directly or indirectly:
                           (i) solicit any employee of Texfi or any subsidiary
                           or affiliate of Texfi or any subsidiary or affiliate
                           of Texfi, who earned annually $25,000 or more as an
                           employee during the last six months of 
 
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                            Parise's employment by Texfi, to work for any
                            business, individual, partnership, firm, corporation
                            or other entity then in competition with the
                            business of Texfi or any of its subsidiaries or
                            affiliates; or (ii) wrongfully interfere with,
                            disrupt or attempt to disrupt the relationship,
                            contractual or otherwise, between Texfi and any
                            other party, including without limitation any
                            supplier, distributor, lessor or lessee, licensor or
                            licensee.
                  12.3 Scope. Parise acknowledges and agrees that the covenants
set forth in Sections 12.1 and 12.2 shall be enforceable in accordance with
their terms notwithstanding any termination of the Agreement or his employment
by Texfi, for any reason whatsoever, including without limitation, the
termination of his employment under the circumstances described in Sections
10.3, 10.4, 10.5 and 10.6; and the obligations set forth in Sections 12.1 and
12.2 shall continue as therein provided irrespective of whether payments are
required by Texfi to Parise under the Agreement except that Parise shall not be
bound by said covenants if Texfi fails to make any payments which, under the
terms of the Agreement, it has agreed to make to Parise after the termination of
his employment.
                  12.4 Savings Clause. It is the desire and intent of the
parties that the provisions of Sections 12.1 and 12.2 shall be enforced to the
fullest extent permitted under the laws and public policies of each jurisdiction
in which enforcement is sought. Accordingly, if any particular portion of
Sections 10.1 and 10.2 shall be adjudicated to be invalid or unenforceable, such
adjudication shall apply only with respect to the operation of that portion in
the particular jurisdiction in which such adjudication is made, and all 

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other portions shall continue in full force and effect.
         13.      Confidential Information; Rights to Materials.
                  13.1 Confidential Information. Parise agrees not to disclose,
either while in Texfi's employ or at any time thereafter, to any person not
employed by Texfi, or not engaged to render services to Texfi, any confidential
and proprietary information of Texfi obtained ;by him while in the employ of
Texfi, including, without limitation, any of Texfi's methods, processes,
techniques, shop practices, formulae, research data, marketing and sales
information, personnel data, customer lists, financial data, plans, and all
other know-how, trade secrets and proprietary information of Texfi; provided,
however, that this provision shall not preclude Parise from use or disclosure of
information known generally to the public (other than information known
generally to the public as a result of a violation of this Section 12.1 by
Parise), from use or disclosure of information acquired by Parise outside of his
affiliation with Texfi, from disclosure required by law or court order, or from
disclosure appropriate and in the ordinary course of carrying out his duties and
authorities hereunder (e.g., disclosure to Texfi's outside accountants, bankers
or trade creditors of financial data properly requested by such persons).
                  13.2 Rights to Materials. Parise also agrees that, upon
termination of his employment for whatever reason, he will not take with him,
without the prior written consent of an officer authorized to act in the matter
by the Board of Directors, any records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents, specifications, and the
like (or any copies thereof) relating to the business of Texfi.
         14. Assignment by Texfi. This Agreement shall be binding upon and shall
inure 

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to the benefit of Texfi or any corporation or other entity to which Texfi
may transfer all or substantially all of its assets and business (by operation
of law or otherwise) and to which Texfi may assign this Agreement, in which case
"Texfi," as used herein, shall mean such transferee corporation or other entity.
         15.      Governing Law.    This  Agreement  shall be governed by and 
construed in  accordance  with the laws and judicial decisions of the State of 
North Carolina.
         16.      Entire Agreement. This Agreement contains all of the 
understandings and agreements of the parties  hereto with  respect to the 
employment  of  Parise  by the  company  and  supersedes  all  prior
understandings and agreements between the parties, whether oral or in writing.
         17. Amendment; Waiver. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by Parise and by an officer of the Company duly authorized to
sign by the Board of Directors of the Company. No waiver by either party hereto
of any breach by the other of any provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar provision
at the same time or at any prior or subsequent time.
         18.      Severability.     If any one or more of the provisions 
contained in this Agreement shall be invalid, illegal, or unenforceable in any 
respect under  applicable  law, the  validity, legality or enforceability of the
remaining provisions shall not in any way be effected or impaired thereby.
         19.      Withholding.      Anything herein to the contrary 
notwithstanding, all 


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payments made by the Company hereunder shall be subject to 
the withholding of such amounts  relating to taxes as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
         IN WITNESS  WHEREOF,  the parties hereby have executed this Agreement 
as of the 1st day of April,
1997.

                                                      TEXFI INDUSTRIES, INC.


                                                  By: /s/ William L. Remley
                                                          William L. Remley,
                                                        Chief Executive Officer

                                                       EMPLOYEE:


                                                  /s/ Andrew J. Parise, Jr.
                                                      Andrew J. Parise, Jr.